Muni-Bond Market’s Favorite No-Risk, Can’t-Lose Trade Is Back
- Floating-rate yields jump above those on 10-year debt
- ‘It’s the best buying opportunity of the year,’ investor says
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The municipal-bond market’s favorite can’t-lose trade is back.
So called variable-rate demand obligations -- which are virtually risk proof because they can be sold back at full face value to Wall Street banks as frequently as every day -- are yielding 1.18%, more than fixed-rate municipal bonds that don’t mature for a decade. And those yields have been steadily rising since mid-January, in contrast to the rest of the $3.8 trillion municipal market.